Oil prices subdued as traders await clarity over ceasefire extension, next round of US-Iran talks

International oil prices traded lower on Tuesday morning as traders awaited clarity on the extension of the US–Iran ceasefire and the next round of peace talks between the two countries.

Concerns about escalation intensified after the US Navy boarded and seized an Iranian cargo ship.

While the US has confirmed participation in the next round of talks in Pakistan, Iran has not yet committed and has accused Washington of violating the ceasefire through its ongoing naval blockade and the seizure of Iranian vessels.

The current ceasefire is set to expire on Tuesday (21 April), adding to market anxiety.

At 6:45 am, the June contract of Brent crude on the Intercontinental Exchange was trading at $94.98 per barrel, down 0.52% from its previous close. Meanwhile, the May contract of West Texas Intermediate (WTI) on the NYMEX fell 0.77% to $86.65 a barrel.

Violation claims

Iranian Ministry of Foreign Affairs spokesman Esmaeil Baghaei said on Monday that the US had “violated the ceasefire from the beginning of its implementation”, citing the naval blockade imposed since 13 April and the overnight capture of an Iranian container ship by the US Navy.

A Reuters report, citing a senior Iranian official, said Tehran is weighing participation in the Pakistan talks following Islamabad’s efforts to end the US blockade.

Iranian foreign minister Abbas Araqchi said that "continued violations” of the ceasefire by the US are hindering further negotiations. Meanwhile, Iranian parliament speaker Mohammad Bagher ‌Ghalibaf said Tehran would not negotiate under threats.

US President Donald Trump said Washington would not lift the naval blockade until a peace deal is reached.

Posting on Truth Social, Trump said the blockade is "absolutely destroying Iran" and that the US is winning the conflict "by a lot".

Hormuz impact

The closure of the Strait of Hormuz has cut off about one-fifth of global oil and gas supplies, raising concerns about sustained disruptions.

Before the conflict, India sourced about 60% of its crude oil imports and 90% of its cooking gas imports through the strategic waterway.

On Monday, Randhir Jaiswal, spokesperson for the ministry of external affairs, said the government is in constant touch with Iranian authorities to ensure safe passage of Indian-flagged vessels after two such ships were forced to turn back to the Persian Gulf due to firing by the Iran Revolutionary Guard Corps on Saturday.

Since 28 February, 10 India-flagged ships carrying energy commodities have transited safely through the channel. Another vessel is set to berth at an Indian port by 22 April.

Bulk carriers Samnar Herad and Jag Arnav reported a firing incident while transiting the strait over the weekend and had to return to the Persian Gulf.

Crude oil tanker Desh Garima, carrying 97,422 tonnes of crude oil and 31 Indian seafarers, crossed the strategic waterway on 18 April and is expected to reach Mumbai on Wednesday, 22 April.